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For banks, the landscape is changing, much the way the retailing landscape began to change a decade ago. Prospects and new customers are used to doing business online, switching costs are lower, and consumers are shopping online for all types of products and services – including financial services.
Retailers have learned that customer-generated content, specifically ratings and reviews, help drive acquisition, help increase customer satisfaction, and can be used to make their advertising efforts more fruitful. Today, customer ratings and reviews are standard for top retailers’ Web sites, and banks would do well to follow suit. Forrester and Shop.org found that 96% of top retailers ranked customer ratings and reviews as an effective or very effective tactic at driving conversion.
The Internet brings consumers seemingly endless options for banking, competition is fierce online and offline, and those who take cues from retail marketing can effectively differentiate themselves. This paper will show how customer-generated content strategies and overall transparency can help financial institutions see gains similar to those of online and multichannel retailers.
In short, putting customers in charge, giving them a voice online, then moving that voice to other marketing channels can help banks differentiate themselves in the wake of growing competition.
Forrester’s “Customer Advocacy 2007: How Customers Rate Banks, Brokerages, Insurers, and Credit Card Issuers” states that customer advocacy drives real loyalty. “Customer advocacy” is defined as a customer’s perception that a firm does what’s best for the customer, not just what’s best for its own bottom line. As customer advocacy scores rise across all types of financial institutions, those who have seen the largest gains report that they focus on raising customer satisfaction and loyalty to generate organic sales growth.
Such customer-centric transparency is also the hallmark of retailers who successfully leverage customer ratings and reviews. Companies that embrace the customer voice online reap rewards in creating closer relationships with them, allowing actual users to form their own marketing messages, rather than pushing out a canned advertising message. Customer reviews are seen as more trusted than traditional advertising. According to a global Nielsen survey of 26,486 Internet users in 47 markets, consumer recommendations are the most credible form of advertising among 78% of the study’s respondents.
Today, banking customers have a wide range of choices – regional banks, online-only banking, credit unions. What’s more, consolidation sites such as Mint or Wasabe put even more distance between a bank’s brand and its customers. Also, the comparison shopping engine infrastructure that drives retailers’ profits down is now pointing directly at financial services and products. And this information is becoming more localized with sites such as Yelp, which features user-generated content such as reviews.
All the more reason banks need to expand their relationships with their customers. Financial institutions, like retailers, need to draw customers in and give them ways to engage with their brand.
For banks, engagement is the key to success. A customer reviews program can help a bank identify and engage its mavens, amass an inventory of powerful word of mouth content, and then identify creative techniques to syndicate that content throughout all of these channels.
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